12/04/2026

theSunday Special XII ON SUNDAY APR 12, 2026

Officials and workers at the Fanga’uta Lagoon Bridge construction site. – AFPPIC

Tonga’s debt hampers disaster recovery M ORE THAN four years on from one of the most powerful volcanic eruptions in history, Tonga is struggling to improve its infrastructure as it pays off China’s Exim Bank, taken out to rebuild Nuku’alofa’s central business district after the 2006 riots.

The initial loan, taken out in 2008, was for US$55 million, but with interest, the debt reached more than US$100 million by 2024. Tonga’s government has committed to paying down its debt by 2030, and in the year to June 2025, it paid China US$17.7 million as part of total debt repayments of US$29.4 million. The repayments represent a large share of government spending in the small nation where the annual infrastructure budget was just US$10.1 million. The health budget for the same year was US$24.9 million,

Destroyed beach resorts on the main island of Tongatapu following the 2022 eruption of the Hunga Tonga-Hunga Ha’apai

a massive loan. When Hunga Tonga-Hunga Ha’apai erupted on Jan 15, 2022, the blast could be heard as far away as Alaska and sent a powerful tsunami crashing into Tonga’s main island some 65km away, killing three people. Hundreds of homes were destroyed, businesses flattened and roads washed out, while most water supplies were left Lord Fakafanua said last month that most government programmes to rebuild were complete, but conceded there were “some leftovers” his government needed to finish. The damage caused by the tsunami remains obvious in parts of Tonga. Debris from homes and businesses knocked down by the waves remains scattered near beaches on Tongatapu’s west coast, and on the nearby ‘Eua island, tourists are encouraged to bring cash with them from the capital, Nuku’alofa, as ATMs and banking services have not been restored. But as much as Fakafanua may want to address these issues, he told AFP his government has stopped taking loans. Budget documents show a US$67.36 million (RM271.5 million) loan owed to to do.” “ undrinkable as six inches of ash fell on the Tongan islands. Prime Minister

volcano. – AFPPIC

Tonga committed to signing a loan agreement, and we intend to pay off what we signed

boosted by one-off funding provided by donors, including New Zealand and Australia, to redevelop hospital and nursing buildings. The health budget is expected to be significantly lower this

rate risk being the primary concerns”. The International Monetary Fund says Tonga is at high risk of debt distress. Tonga has received several grants from the World Bank and the Asian Development Bank to build much-needed infrastructure. That includes the US$97 million Fanga’uta Lagoon Bridge project, the largest infrastructure project in Tonga’s history. The 720m bridge will connect Nuku’alofa, with the southern side of the main island, Tongatapu. More than 120 Tongans are working on it to provide an evacuation path for Nuku’alofa in the event of tsunami or cyclones. –AFP

Tongan King Tupou VI, President Xi Jinping said China was ready to “provide assistance to Tonga’s economic and social development” and said he wanted Tonga’s “independence and sovereignty” to be safeguarded. Fakafanua said his country will not be accepting any more Chinese loans. “We’re in a position where we’re not taking any more loans, we’re not taking any more debt,” Fakafanua said. “We’re being a lot more clever with our fiscal management.” According to Tonga’s budget documents, the country faces significant risk from its loan to China, with “refinancing risk and exchange

year, despite the country’s dire rates of obesity, diabetes and non-communicable diseases. “We could use that money for other things,” Fakafanua told AFP when asked if the debt to China hurt Tonga’s health and infrastructure needs. “But Tonga committed to signing a loan agreement, and we intend to pay off what we signed to do.” While Tonga shows fiscal restraint, China wants to spread its influence in the Pacific by offering loans and building infrastructure. During a November visit to Beijing by